Most of the savings of the elderly are deposited in the bank, so why do banks hesitate in giving them credit cards?

Banks themselves promote credit cards. Banks themselves offer credit cards with better limits to all their customers. However banks hesitate in giving credit cards to senior citizens, whereas senior citizens keep most of their funds deposited in the bank as FD. What is the reason behind this hesitation?

After retirement, the elderly prefer to invest their savings in schemes like Fixed Deposit, where their money remains safe. To encourage this thinking of senior citizens, banks also offer them 0.50% more interest on FD than normal customers. But when it comes to giving credit cards to senior citizens, banks hesitate in doing so. Whereas banks themselves promote credit cards enthusiastically.

Many times, the bank itself calls the customer to give him a credit card. But if senior citizens want to get a credit card from the bank, then the banks do not give approval for it easily. Even if the elderly get a secured credit card once, but it is very difficult to get a normal credit card. The issue of not giving credit cards to senior citizens has also been raised in the Rajya Sabha in the year 2024. What is the reason for this? Understand here

Is this the reason for the bank's hesitation?

Actually, a normal credit card comes under the category of unsecured loan. It is completely collateral free. Therefore, before giving a credit card to the customer, the banks assess his income and ensure whether the customer is able to repay the credit card dues or not. Regarding senior citizens, banks believe that at this age they do not have a solid means of earning after retirement. At the same time, health problems increase and the body is not capable of working hard like that. In such a situation, there is a doubt whether they will be able to return the credit card dues or not. Therefore, banks consider giving credit cards to the elderly more risky. However, if the income of an elderly person is good and stable, then banks can give them credit cards with some conditions.

What does RBI rule say

RBI has not made any special rule regarding credit cards to the elderly, but according to the guidelines prepared by RBI for banks, giving loans to any citizen who is above 60 years of age can be more risky. For this reason, banks give debit cards to senior citizens above 60 years of age, but refrain from giving credit cards.

These are the criteria in banks in case of credit cards

Banks have different criteria regarding the minimum and maximum age of the customer for issuing credit cards, for example, in HDFC Bank, the minimum age of applicants for credit card is 21 years. The maximum age is 60 years for salaried and 65 years for businessmen. According to the website of State Bank of India, the minimum age limit for applying for a credit card is 21 years while the maximum age limit is 70 years. Also, the applicant must be salaried or have his own business. Also, he should have a good credit score.

What is a secured card?

It is clear from the name of the secured credit card that it is a card given in exchange for collateral deposit. This card is given in exchange for fixed deposit. Mostly the limit of secured cards is kept up to 85 percent of the FD. As long as the customer's FD remains in the bank, he can use this credit card. But if the payment of the credit card bill is not made by the secured credit card user by the stipulated time for any reason, then the bank has the right to recover its loan by encashing his fixed deposit account.